The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: ild who wrote (73857)	11/8/2006 11:56:47 AM
From: UncleBigs	Read Replies (1) of 110194

as can be shown via overlay charts, a rising trade deficit goes hand in hand with a rising stock market and vice versa. the only time that the trade deficit actually contracted since 1990 was the 2001-2002 period when the stock market was in free-fall. as i have often pointed out here, trade issues are widely misunderstood, mostly on account of economic illiteracy. The only reason that a rising trade deficit has gone hand in hand with a rising stock market is because that is the symptom of the credit bubble. Continued and increasing borrowing and spending has created the illusion of a sustainable prosperity. Heinz, of anyone, should realize that it is clearly a false and unsustainable prosperity. Eventually the consumer will become overwhelmed with debt service and become unable to continue borrow and spend. Also the dollar will eventually decline to arbitrage away much of the apparent cost benefit to globalization. Either we can institute Schumer's trade tariffs or the market will eventually do it via a dollar devaluation. This unilateral, currency peg, deficit recycling trade agreement with China can't and won't be sustained.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next